Fought & Co. v. Steel Engineering & Erection, Inc.Fought & Co. v. Steel Engineering & Erection, Inc.
- Reporters:
- , , ,
- Before:
- Levinson
The plaintiff-appellee Fought & Company (Fought) and the defendants/cross-claimants/cross-claim defendants-appellants/cross-claim defendants-appellees Steel Engineering and Erection, Inc., Continental Casualty Corporation (Continental), which is Steel’s surety, (collectively Steel) and Kiewit Pacific Company (Kiewit) prevailed in Supreme Court No. 19103,
1
which affirmed (1) the circuit court’s order granting (a) Steel’s motion for summary judgment against Kiewit
For the reasons set forth below, we award: (1) attorneys’ fees in the amount of $39,-888.93 and costs in the amount of $163.20 in favor of Fought and against Steel; (2) attorneys’ fees in the amount of $22,005.58 and" costs in the amount of $16,271.76 in favor of Steel and against Kiewit, as well as indemnification in the amount of $40,052.03, representing the costs and fees that Steel is ordered to pay to Fought; and (3) attorneys’ fees in the amount of $30,919.89 and costs in the amount of $11,305.34 in favor of Kiewit and against the DOT, as well as indemnification in the amount of $78,329.37, representing the costs and fees that Kiewit has been ordered to pay to Steel.
L BACKGROUND
The lawsuit underlying the present requests for attorneys’ fees and costs arose out of the construction of a new terminal building, phase I, unit 2, at the Kahului Airport, Kahului,' Maui, designated as project No. AM1042-13 (the project). Kiewit was general contractor for the project. Kiewit subcon
tracted
After a dispute arose pertaining to the correct interpretation of provisions in the project specifications, the DOT claimed that Fought, Steel, and Kiewit had all breached their respective contracts by providing and/or utilizing nonconforming steel and, accordingly, withheld $312,000.00 in compensation for the alleged breach from its payments to Kiewit. As a result, Kiewit withheld $312,000.00 under its subcontract with Steel, and Steel withheld the same amount from its payment to Fought.
Fought then filed suit, seeking payment of the $312,000.00 from Steel. Steel cross-claimed against Kiewit, and Kiewit cross-claimed against the DOT. As a result of motions for summary judgment filed by Fought, Steel, and Kiewit, judgments were entered in favor of Fought and against Steel, in favor of Steel and against Kiewit, and in favor of Kiewit and against the DOT. In an order filed on May 8, 1995, the circuit court ruled:
1. Steel Engineering is entitled to judgment against Kiewit for whatever amount Steel Engineering is ultimately held liable to Fought. The Court has already ruled that Steel Engineering is liable to Fought for $312,000 plus interest at the legal rate of 10% per annum as provided in Section 478-2(4) of the Hawaii Revised Statutes. Accordingly, Steel Engineering is entitled to a judgment against Kiewit for $312,000 plus interest at the legal rate of 10% per annum.
[[Image here]]
2. Kiewit is entitled to judgment against the State for whatever amount Kiewit is ultimately held liable to Steel Engineering. Accordingly, Kiewit is entitled to judgment against the State for $312,000 plus interest at the legal rate of 10% per annum.
On May 30, 1995, judgments in the amount of $312,000.00 plus interest at the rate of ten percent per annum, were entered against Kiewit and the DOT and were certified for appeal pursuant to Hawai'i Rules of Civil Procedure (HRCP) Rule 54(b). 5 The DOT filed a motion to reconsider in order to raise the jurisdictional issue of sovereign immunity. However, the circuit court denied the motion in an order filed on June 26, 1995. The DOT then filed a notice of appeal from the two orders and the judgment.
On appeal, the DOT argued that: (1) the claims asserted against it by Fought, Steel, and Kiewit were barred by the doctrine of sovereign immunity;
6
(2) if the claims
On September 12,1997, Fought, Steel, and Kiewit each filed requests for costs and attorneys’ fees pursuant to HRAP Rule 39,
see supra
note 3, and
In opposition to Fought’s request for fees, Steel argues that: (1) fees for the services of Fought’s retained general counsel, who are licensed to practice law in Oregon where Fought is headquartered and assisted Fought’s attorneys in Hawai'i in the preparation of the appeal, are not recoverable pursuant to the provisions of
Kiewit, in turn, conditionally opposes Steel’s requests for attorneys’ fees and costs, arguing that if Steel is permitted to recover the premiums paid on its supersedeas bond, which was posted to forestall execution of judgment by Fought until the resolution of the appeal, and if Steel is further permitted to recover costs of attorneys’ fees in its mooted cross-appeal against Fought, then Kiewit likewise is entitled to recover its premium costs for the supersedeas bond posted to forestall execution of judgment by Steel and its attorneys’ fees incurred in the prosecution of its mooted cross-appeal against Steel.
The DOT argues, in opposition to Steel’s requests for attorneys’ fees and costs, that: (1) the costs of Steel’s supersedeas bond and of its filing fee are not taxable pursuant to the provisions of HRAP Rule 39 because they were unnecessary to preserve Steel’s rights against Kiewit, over whom Steel prevailed on appeal; (2) Steel’s claim for indemnification from Kiewit in the amount of any attorneys’ fees and costs for which Steel may be found liable to Fought is a request for post-judgment damages, which the DOT contends that this court lacks jurisdiction to consider; and (3) Steel and Kiewit are entitled only to costs and attorneys’ fees for the portion of their appeals on which they pre
vailed,
Finally, the DOT opposes Kiewit’s requests for fees and costs, arguing that: (1) the doctrine of sovereign immunity precludes any award of fees against the DOT pursuant to
II. DISCUSSION
The extensive list of objections described above generates four threshold questions that must be answered before we can resolve the requests for attorneys’ fees and costs that Fought, Steel, and Kiewit have submitted: (1) whether, pursuant to the provisions of
A.
Fees Of Attorneys Who Are Licensed, And Perform Services In Other Jurisdictions And Who Assist Attorneys Licensed In HawaVi In The Prosecution Of Litigation In The Courts Of HawaVi Are Recoverable Pursuant To The Provisions Of
Both Steel and the DOT argue that Fought’s request for taxation of the fees of Kobin and Kobin (Kobin), its retained general counsel, must be denied, inasmuch as no member of that firm is licensed to practice law in this jurisdiction, and such an award would therefore violate the public policy embodied in
In interpreting a statute,
“our foremost obligation is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself. And we must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose.
When there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in a statute, an ambiguity exists....
In construing an ambiguous statute, “[t]he meaning of the ambiguous words may be sought by examining the context, with which the ambiguous words, phrases, and sentences may be compared, in order to ascertain their true meaning.’HRS § 1-15(1) (1993). Moreover, the courts may resort to extrinsic aids in determining legislative intent. One avenue is the use of legislative history as an interpretive tool.”
State v. Cullen,
unlawful for any person, firm, association, or corporation to engage in ... the prae-tice of law, ... except and to the extent that the person, firm, or association is licensed or authorized so to do by an appropriate court, agency, or office or by a statute of the State or the United States[.]
However, because the “practice of law” is nowhere defined in HRS ch. 605, the statute presents an ambiguity that must be resolved by resort to legislative history.
First enacted in 1955,
the practice of law is not limited to appearing before the courts. It consists, among other things of the giving of advice, the preparation of any document or the rendition of any service to a third party affecting the legal rights ... of such party, where such advice, drafting or rendition of service requires the use of any degree of legal knowledge, skill or advocacy.
Sen. Stand. Comm. Rep. No. 700, in 1955 Senate Journal, at 661 (emphasis added); see also Hse. .Stand. Comm. Rep. No. 612, in 1955 House Journal, at 783.
Similarly, while it has explored the concept’s dimensions, this court has never formally defined the term “practice of law.” In
In re Ellis,
Our holdings in
Lau
and the other cases cited above are not incompatible with the proposition that the “practice of law” entails far more than merely appearing in court proceedings. Moreover, other jurisdictions, in seeking to define the “practice of law,” have reached a similar conclusion. The California Supreme Court, for example, has expressed the position that, for the purposes of that state’s statute restricting the practice of law to “active member[s] of the State Bar,” such practice includes “‘the doing and performing [of] services in a court of justice in any matter depending therein throughout its various stages and in conformity with the adopted rules of procedure,’ [the rendering of] legal ádvice[,] and legal instrument and contract preparation^]”
Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court of Santa Clara County,
In the present matter, Kobin was engaged in such activity as consultation with Fought and Fought’s Hawai'i counsel regarding the appeal, preparation of Fought’s statement of position in anticipation of mediation, assisting Fought’s Hawai'i counsel with legal research, analysis of briefs and papers submitted by other parties to the litigation, resolution of issues pertaining to the posting of Steel’s supersedeas bond, planning Fought’s strategy for the appeal, and reviewing and critiquing the briefs and other papers prepared by Fought’s Hawai'i counsel. It is apparent that Kobin was “practicing law” when it engaged in these activities.
However, this determination does not end our inquiry.
the tension that exists between interjuris-dictional practice and the need to have a state-regulated bar. As stated in the American Bar Association Model Code of Professional Responsibility, Ethical Consideration EC 3-9, “Regulation of the practice of law is accomplished principally by the respective states. Authority to engage in the practice of law conferred in any jurisdiction is not a per se grant of the right to practice elsewhere, and it is improper for a lawyer to engage in practice where he is not permitted by law or by court order to do so. However, the demands of business and mobility of our society pose distinct problems in the regulation of the practice of law by the states. In furtherance of the public interest, the legal profession should discourage regulation that unreasonably imposes territorial limitations upon the right of a lawyer to handle the legal affairs of his client or upon the opportunity of a client to obtain the services of a lawyer of his choice in all matters including the presentation of a contested matter in a tribunal before which the lawyer is not permanently admitted to practice.”
Birbrower,
A blanket rule prohibiting the taxing of fees for the services of extrajurisdictional legal counsel who assist local counsel in the conduct of litigation among parties, who are themselves domiciled in different jurisdictions, would be an imprudent rule at best. At a minimum, the result would be to increase the total cost of legal representation and to magnify the difficulty of controlling multijurisdictional litigation. Moreover, such a rule might also create an incentive for ethical violations, inasmuch as Hawaii Rules of Professional Conduct (HRPC) Rule 1.1 mandates that “[a] lawyer shall provide competent representation to a client.” In many instances involving complex litigation among parties domiciled in different jurisdictions, competent representation undoubtedly
requires
consultation with legal counsel licensed to practice in another jurisdiction. To prohibit an award of fees for these services would only undermine the policies underlying
In
Birbrower,
the California Supreme Court recently addressed these issues in deciding whether a fee agreement between a California client and its New York law firm was rendered unenforceable by the provisions of a California statute prohibiting the practice of law by persons who are not active members of the California bar. The
Bir-brower
court reasoned that the prohibition, set forth in California Business and Professions Code § 6125, against the practice of law by unlicensed persons precluded recovery under the fee agreement for any services that the New York-licensed attorneys performed
in California. Birbrower,
the practice of law “in California” entails sufficient contact with the California client to render the nature of the legal service a clear legal representation. In addition to a quantitative analysis, we must consider the nature of the unlicensed lawyer’s activities in the state. Mere fortuitous or attenuated contacts will not sustain a finding that the unlicensed lawyer practiced law “in California.” The primary inquiry is whether the unlicensed lawyer engaged in sufficient activities in the state, or created a continuing relationship with the California client that included legal duties and obligations.
Id.,
Considering Robin’s activities in light of the factors suggested by
Birbroiver,
we hold that it did not practice law “within the jurisdiction,” that is, “in Hawaii,” and, therefore, that it was not subject to the restrictions
B. Although The Summary Judgment Entered In Favor Of Steel And Kiewit And Against Kiewit And The DOT, Respectively, Does Not, On Its Face, Order Indemnification Of Steel Or Kiewit For Attorneys' Fees and Costs Taxed Against Them, The Uye-mura Rule Permits Recovery Of Expenses Incurred By Parties Drawn Into Litigation With Third-Parties By The Wrongful Act of Another.
Steel and Kiewit contend that, to the extent that they are liable for the attorneys’ fees reasonably incurred by the party prevailing against them in this appeal, these sums should be incorporated into the judgments entered in their favor, which,
inter alia,
entitle them to an award of attorneys’ fees against the party over
whom
they prevailed. They urge two grounds in support of this result. First, they argue that the circuit court’s order filed on May 8, 1995 authorizes these amounts by way of indemnification, inasmuch as it provides that Steel and Kiewit are “entitled to judgment against [the party over whom they prevailed] for whatever amount [they were] ultimately held liable to [the party- who prevailed against them].” Steel and Kiewit reason that, because the DOT filed a notice of appeal from that order, this court’s summary disposition order affirming “the judgment(s) or order(s) from which the appeal is taken” renders the circuit court’s order “the law of the case,” and, therefore, that this court may incorporate its terms into any awards of attorneys’ fees incurred on appeal that we are authorized to allow pursuant to
The DOT counters that the circuit court’s May 8, 1995 order cannot provide a legal basis for ordering indemnification because, inasmuch as only the judgment in the amount of $812,000.00, plus interest, was certified for appeal pursuant to HRCP 54(b), the other provisions of the order are not properly before this court on appeal. The DOT also contends that, if Steel and Kiewit are entitled to recover such expenses pursuant to the
Uyemura
rule, this court may not incorporate that recovery into any taxation of attorneys’ fees pursuant to
1.
The circuit court's May 8, 1995 order does not provide a legitimate basis for this court to incorporate awards of attorneys’ fees taxed against Steel and Kiewit pursuant to
“The doctrine of the law of the ease states that a determination of a ques tionof law made by an appellate court in the course of an action becomes the law of the case and may not be disputed by a reopening of the question at a later stage of the litigation. This doctrine applies to issues that have been decided either expressly or by necessary implication.”
Tabieros v. Clark Equip. Co.,
As a general matter, an appellate court’s jurisdiction is limited to a review of final judgments, orders and decrees. A judgment is final when all claims of the parties to the case have been terminated. Absent the entry of final judgment as to all claims, an appeal may generally be taken from a nonfinal order or decree if (1) leave to take an interlocutory appeal has been granted by the circuit court pursuant toHRS § 641-1 (b) ; (2) the order or decree has been certified as final for appeal purposes pursuant to [HRCP] Rule 54(b); (3) the order or decree being appealed is an “ap-pealable order” under the collateral order doctrine; (4) the order or decree being appealed is an “appealable order” under the Forgay doctrine; or (5) the order or decree is immediately appealable pursuant to statutory provision.
Wong v. Takeuchi,
On June 29, 1995, the DOT filed its Notice of Appeal, which stated:
Notice is hereby given that Defendant State of Hawaii (State) ... appeals to the Supreme Court and Intermediate Court of Appeals of the State of Hawaii from the[:]
(1) Order Granting (1) Defendant Steel Engineering & Erection, Inc.’s (“Steel”) Motion for Summary Judgment Against Kiewit Pacific Co. (“Pacific”) and State (2) Defendant Kiewit Pacific Co.’s (“Kiewit”) Motion for Summary Judgment Against Defendant State entered on May 8, 1995 and attached hereto as Exhibit “A”;
(2) Judgment certified as final pursuant to Haw. R. Civ. Proc. Rule 54(b), entered on May 30, 1995 and attached hereto as Exhibit “B”[;]
(3) Order Denying State’s Motion for Reconsideration filed and entered on June 26, 1995, attached hereto as Exhibit “C[.]"
However, the May 8, 1995 order designated in the DOT’s notice of appeal provided in relevant part:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Defendant Steel Engineering & Erection, Inc.’s Motion for Summary Judgment against Defendant Kiewit Pacific Co. and the State of Hawaii and Defendant Kiewit Pacific Co.’s Motion for Summary Judgment Against Defendant State of Hawaii and GRANTED as follows:
1. Steel Engineering is entitled to judgment against Kiewit for whatever amount Steel Engineering is ultimately held liable to Fought. The Court has already ruled that Steel Engineering is liable to Fought for $312,000 plus interest at the legal rate of 10% per annum as provided in Section 478-2(4) of the Hawaii Revised Statutes. Accordingly, Steel Engineering is entitled to judgment against Kiewit for $312,000 plus interest at the legal rate of 10% per annum.
No genuine issue of material fact remains with regard to this $312,000 plusinterest, and Steel Engineering is entitled to judgment as a matter of law.
Furthermore, pursuant to Rule 51(b) of the Hawaii Rules of Civil Procedure, this Court finds that there is no just reason for delay and directs entry of final judgment in favor of Steel Engineering for the amount of $312,000 plus interest, and its costs in this action.
2. Kiewit is entitled to judgment against the State for whatever amount Kiewit is ultimately held liable to Steel Engineering. Accordingly, Kiewit is entitled to judgment against the State for $312,000 plus interest at the legal rate of 10% per annum.
No genuine issue of material fact remains with regard to this $312,000 plus interest, and Kiewit is entitled to judgment as a matter of law.
Furthermore, pursuant to Rule 51(b) of the Hawaii Rules of Civil Procedure, the Court finds that there is no just reason for delay and directs entry of final judgment in favor of Kiewit for the amount of $312,-000 plus, interest, and its costs in this action.
3. The Court retains jurisdiction as to other matters not herein determined, including without limitation, any rights that any of the parties may have to recover attorneys’ fees.
(Emphases added.)
Moreover, the Judgment entered on May 30,1995 provided only that:
Pursuant to Defendant Kiewit Pacific Co.[ ]⅛ Order Granting: (1) Defendant Steel Engineering & Erection, Inc.’s Motion for Summary Judgment Against Defendant Kiewit Pacific Co., and the State of Hawaii and (2) Defendant Kiewit Pacific Co.’s Motion for Summary Judgment Against Defendant State of Hawaii Filed May 8,1995,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Judgment is hereby entered in favor of Defendant STEEL ENGINEERING & ERECTION, INC. and against Defendant KIEWIT PACIFIC CO., in the principal amount of $312,000, together with interest at the legal rate of ten percent (10%) per annum as specified byHaw.Rev.Stat. § 478-2(4) (Supp.1992), from September 4, 1992 until paid. As of May 1, 1995, such interest amounts to $82,830.12 and continues to accrue thereafter at a per diem rate o[f] $85.48 until paid.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Judgment is hereby entered in favor of Defendant KIEWIT PACIFIC CO. and against the STATE OF HAWAII, in the principal amount of $312,000.00, together with interest at the legal rate of ten percent (10%) per annum as specified byHaw.Rev.Stat. § 478-2(4) (Supp.1992), from September 4, 1992 until paid. As of May 1, 1995, such interest amounts to $82,830.12 and continues to accrue thereafter at a per diem rate o[f] $85.48 until paid.
There being no just reason for delay, this judgment is certified as final pursuant toHaw. R. Civ. P. 54(b) . The Court retains jurisdiction over all other claims in this action, including without limitation, awards of attorneys’fees and costs.
(Emphases added.)
The wording of both the order and the judgment make clear that only the judgment in the amount of $312,000.00 plus intérest was certified to this court pursuant to HRCP 54(b). The certified judgment does not address or dispose of any additional issues relating to liability. The portion of the order that was
not
certified pursuant to HRCP 54(b)—and was not, therefore, appealable— could not have been affirmed by this court and, accordingly, could not establish “the law of the case.” That being so, it provides no basis for ordering indemnification with respect to the taxation of attorneys’ fees incurred on appeal pursuant to
2. The Uyemura rule may be applied by appellate courts in order to permit recovery of a third-parties’ attorneys’ fees and costs that have been taxed against parties involved in litigation because of the wrongful act of another.
Normally, pursuant to the “American Rule,” each party is responsiblefor paying his or her own litigation expenses. This general rule, however, is subject to a number of exceptions: attorney’s fees are chargeable against the opposing party when so authorized by statute, rule of court, agreement, stipulation, or precedent.... [T]his court has applied the exception where the wrongful act of the defendant causes the plaintiff to litigate with a third party. In Uyemura v. Wick, 57 Haw. 102 ,551 P.2d 171 (1976), we held that,
where the wrongful act of the defendant ... has involved the plaintiff in litigation with [another ... ], or placed [the plaintiff] in such relations with others as makes it necessary to incur expenses to protect his [or her] interest, such expenses, including attorneys’ fees should be treated as the legal consequences of the original wrongful act, and may be recovered as damages.
Id. at 108-09,551 P.2d at 176 (emphasis added).
Thus, where the wrongful act .óf a defendant causes a plaintiff to engage in litigation with a third party in order to protect his or her rights or interests, attorney’s fees incurred in litigating ivith that third party may be chargeable against the wrongdoer as an element of the plaintiffs damages.
In order to recover attorneys’ fees under this principle, the plaintiff must establish: (1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant, or because of the defendant’s tortious conduct, that is, that the party sought to be charged with the fees was guilty of a wrongful or negligent act or breach of agreement; (2) that the litigation was with a third party, not with the defendant from whom the fees are sought to be recovered; (3) that the attorneys’ fees were incurred in that third-party litigation; and (4) whether the fees and expenses were incurred as a result of defendant’s breach of contract or tort, they are the natural and necessary consequence of the defendant’s act, since remote, uncertain, and contingent consequences do not afford a basis for recovery[.]
Uyemura,57 Haw. at 109 ,551 P.2d at 176 (citations omitted).
Lee v. Aiu,
While this court has never expressly addressed the question, the courts of other jurisdictions have recognized that an award of costs and fees to a prevailing party is inherently in the nature of a damage award.
See Donovan v. Delaware Water and Air Resources Comm’n,
Moreover, this court has implicitly recognized that an award of attorneys’ fees might require resolution of factual questions when it refused to rule on a request for fees incurred
at trial
because the request raised “evidentiary-type issues” best left to the trial court.
S. Utsunomiya Enters. v. Moomuku Country Club,
A close examination of this court’s past application of the
Uyemura
rule reveals that the DOT’s second argument is equally unpersuasive. In
Lee v. Aiu, supra,
Lee was the owner of a piece of real property, who sued Aiu, the co-signee of her mortgage (and whose name appeared on the deed to the property as a joint tenant), and Aiu’s real estate agents, the Dixons, when the Dixons induced Aiu to sell his interest in the property to them after first agreeing to remove his name from the deed in exchange for the receipt of $25,000.00 from Lee.
When the Dixons appealed a judgment against them in favor of Lee, Lee cross-appealed, arguing that the trial court had erred in refusing to allow her to introduce evidence of her attorneys’ fees incurred in litigating with Aiu as an element of her damages in the TICR claim.
Id.
at 28, 32,
Clearly, the Dixons’ actions were not the sole cause of the injuries to Lee; Aiu’s own conduct was, in part, responsible. Nevertheless, citing Uyemura, this court held that, insofar as “Lee became involved in a legal dispute with Aiu because of the Dixons’ tortious interference with the contractual relation between Lee and Aiu,” Lee was entitled to recover “that portion of [her] attorney’s fees ... attributable to [her] litigation with [Aiu]” from the Dixons. Accordingly, the DOT’s contention that a defendant’s wrongful act must be the sole cause of a plaintiffs litigation with a third party in order to enable the plaintiff to recover attorneys’ fees expended in the third-party litigation is without merit.
We therefore hold that the Uyemu-ra rule may be applied by appellate courts, as warranted, in taxing attorneys’ fees and costs incurred on appeal.
C. Inasmuch As Steel And Kiewit Prevailed On The Principal Issues Raised On Appeal, They Are “Prevailing Parties’’ For The Purpose Of Awarding Attorneys’ Fees And Costs.
A party need not “sustain his entire claim” in order to be a “prevailing party” for purposes of entitlement to costs and attorneys’ fees.
MFD Partners v. Murphy,
“where a party prevails on the disputed main issue [in a case], even though not tothe extent of his original contention, he will be deemed to be the successful party for the purpose of taxing costs and attorney’s fees.” Food Pantry, Ltd.[ v. Waikiki Business Plaza, Inc.], 58 Haw. [606,] 620, 575 P.2d [869,] 879 [(1978)]. The ... court is required to first identify the principal issues raised by the pleadings and proof in a particular case, and then determine, on balance, which party prevailed on the issues. Id.
MFD Partners,
From the beginning, the principal question at issue in this case, both at trial and on appeal, was whether the DOT had breached its contract. Both Steel and Kiewit consistently maintained that it had and that Fought was entitled to the full contract price for the steel used in the construction of the terminal building. Their secondary argument—that if the DOT was not hable on its contract, then neither were they—was purely defensive and advanced to avoid liability for breach in the event that the DOT was somehow successful in itself avoiding liability. Inasmuch as the DOT was unsuccessful, the circuit court’s judgment against it being affirmed, Steel and Kiewit can fairly be said to have prevailed “on the disputed main issue” and therefore are entitled to recoup all of their litigation expenses pursuant to
The
Uyemura
rule reinforces the foregoing conclusion.
See supra
section II. B.2. As we have indicated, in order to recover costs and attorneys’ fees under
Uyemura,
a party must establish that: (1) it became involved in a legal dispute because of the wrongful act of the party to be charged; (2) the resulting litigation was with a third party; (3) the attorneys’ fees and costs sought to be charged were incurred in the third-party litigation; (4) the attorneys’ fees and costs incurred were the natural and necessary consequences of the wrongful act of the party to be charged; and (5) the fees and costs are reasonable.
Uyemura,
We note that the
Uyemura
rule does
not
require that the party seeking recovery of expenses “prevail” in the third-party litigation.
Occidental Underwriters,
in which a mortgagor and mortgagee were sued by an insurer when the mortgagee failed to make a premium payment, is a case in point.
The underlying dispute in
Occidental Un-denvriters
was settled in favor of the insurer; the mortgagor and mortgagee did not prevail. The mortgagee was nevertheless entitled to recover his attorneys’ fees from the mortgagor if the mortgagee’s involvement in the lawsuit arose from a "wrongful act of the mortgagor. Analogously, even though Steel and Kiewit did not “prevail” in their cross-appeals, which were mooted by the outcome of the DOT’S appeal, they are entitled to recover their expenses, incurred in litigating with Fought and Steel, from the DOT if (1) their involvement in the litigation occurred because of a wrongful act committed by the DOT, and (2) the expenses were the natural and necessary consequences of that act. The
The DOT’s argument that Steel and Kiew-it’s expenses were “unnecessary” is unpersuasive, inasmuch as it is based upon the naive assertion that Steel and Kiewit should have paid Fought following the entry of judgment by the circuit court and then simply waited until the conclusion of the DOT’s appeal to—possibly—collect indemnification from the DOT. The DOT’s proposed scenario is unreasonable for two reasons. First, such a payment would have deprived Steel and Kiewit of the use of their money for the duration of whatever period of time was necessary for the prosecution of the DOT’s appeal—with little likelihood that their opportunity costs would ever be recovered. Second, had the DOT been successful in its appeal— for example, if its claim of sovereign immunity had allowed it to escape liability under its contract—, Steel and Kiewit would then have been solely liable for payment of the judgment in favor of Fought with no avenues available for recovering their costs.
It is unreasonable to expect a business to place itself in such a vulnerable and avoidable position. Steel’s and Kiewit’s litigation strategy was necessary to maintain their financial integrity. To penalize them for protecting themselves from the threat of loss would be to violate the “basic concept of contract law ... that a party who sustains a loss by the breach of another is entitled to compensation that will actually or precisely as possible compensate the injured party.”
Hi Kai Inv., Ltd. v. Aloha Futons Beds and Waterbeds,
For the reasons outlined above, we hold that Steel and Kiewit are entitled to recovery of the expenses that they incurred in litigation with Fought and Steel, respectively, from Kiewit and the DOT.
D. Inasmuch As The Present Action Is In The Nature Of Assumpsit, The Doctrine of Sovereign Immunity Does Not Bar Taxation of Fees Against the DOT.
Finally, the DOT argues that the doctrine of sovereign immunity forecloses Kiewit from being awarded costs and attorneys’ fees against it. This question would appear to have been settled by
Hawaiian Isles Enterprises v. City and County of Honolulu,
This court stated in
Hawaiian Isles
that “
“[T]he sovereign state is immune from suit for money damages, except where there has been a ‘clear relinquishment’ of immunity and the State has consented to be sued.”
Bush v. Watson,
The unrestricted application of
The view that a waiver of sovereign immunity in contract and other cases renders the state liable to the same extent as other litigants has been adopted by many other jurisdictions that have addressed the issue.
See, e.g., Division of Child Support Enforcement v. Smallwood,
In an attempt to avoid the plain meaning of
Thus, in
Chock,
there was no clear waiver of the state’s sovereign immunity from suit. Were the same true here, the imposition of costs and attorneys’ fees against the DOT would obviously be prohibited. However, in contrast to the statute at issue in
Chock,
E. The Parties May Only Recover Attorneys’ Fees Reasonably Incurred On Appeal.
The only remaining question is whether the parties requesting taxation of attorneys’ fees and costs have met the requirements of
Our review of Fought’s billing statements persuades us that the foregoing arguments are well taken. Fought’s Hawai'i counsel records 9.6 hours of works performed in preparation of a motion for attorneys’ fees filed in the trial court. The billing statement submitted by Fought’s general counsel indicates that twelve hours were billed for the same activity. Fought’s general counsel also claims 4.5 hours expended in forwarding faxes from Hawai'i counsel to Fought and summarizing teleconferences conducted with Hawai'i counsel. Steel and-the DOT correctly assert that Fought’s Ha-wai'i counsel could as easily have communicated directly with Fought and thus avoided these expenses. Because they appear unreasonable, we will not allow the taxation of these costs. Accordingly, the attorneys’ fees requested by Fought’s Hawai'i counsel are reduced by $1872.00, and the sum requested by Fought’s general counsel is reduced by $2475.00. We have reviewed the remaining requests for costs and attorneys’ fees and find them to be both reasonable and properly submitted.
III. CONCLUSION
Fought’s request for costs and Steel’s and Kiewit’s requests for costs and attorneys’ fees are allowed as submitted. Fought’s request for attorneys’ fees is reduced in the amount of $4347.00, which is attributable to professional services that we have deemed unreasonable to tax against the non-prevailing party. Accordingly, Steel is ordered to pay to Fought a total of $40,052.03—$39,-888.83 for attorneys’ fees and $163.20 for costs. Kiewit is ordered to pay Steel a total of $78,329.37—$40,052.03 for the costs and attorneys’ fees taxed against Steel and in favor of Fought, $22,005.58 for Steel’s attorneys’ fees, and $16,271.76 for Steel’s costs on appeal. The DOT is ordered to pay Kiewit
Notes
. This appeal consolidates three cases, originally Supreme Court Nos. 19103, 19128, and 19152, under No. 19103. Case Nos. 19128 and 19152, respectively, appeal the judgments in favor of Fought and against Kiewit and Steel.
.
Attorneys’ fees in actions in the nature of assumpsit, etc. In all the courts, in all actions in the nature of’ assumpsit ..., there shall be taxed as attorneys’ fees to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable; provided that the attorney representing the prevailing party shall submit to the court an affidavit stating the amount of time the attorney spent on the action and the amount of time the attorney is likely to spend to obtain a final written judgment, or, if the fee is not based on an hourly rate, the amount of the agreed upon fee. The court shall then tax attorneys' fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.
[[Image here]]
The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys’ fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains a judgment.
. HRAP Rule 39 provides in relevant part:
COSTS.
(a)To Whom Allowed. Except in criminal cases or as otherwise provided by law, ... if a judgment is affirmed or a petition denied, costs shall be taxed against the appellant or petitioner unless otherwise ordered....
(b) Costs For and Against the State of Ha-wai'i. In cases involving the State of Hawai'i or an agency or officer thereof, if an award of costs against the State is authorized by law, costs shall be awarded in accordance with the provisions of this rule....
(c) Costs Defined. Costs in the appellate courts are defined as (1) the costs of the original and one copy of the reporter’s transcripts if necessary for the determination of the appeal, (2) the premiums paid for supersedeas bonds or other bonds to preserve rights pending appeal, (3) the fee for filing the appeal, and (4) the cost of printing or otherwise producing necessary copies of briefs and appendices.
(d) Bill of Costs; Objections. A party who desires an award of costs shall state them in an itemized and verified bill of costs, together with a statement of authority for each category of item, filed with the clerk with proof of service, no later than 14 days after entiy of judgment....
.
Policyholder and other suits against insurer. Where an insurer had contested its liability under a policy and is ordered by the courts to pay benefits under the policy, the policy holder, the beneficiary under the policy, or the person who has acquired the rights of the policyholder or beneficiary under the policy shall be awarded reasonable attorney’s fees and the costs of suit in addition to the benefits under the policy.
. HRCP
(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
. The DOT'S claim of sovereign immunity rested upon
Jurisdiction. The several circuit courts of the State and, except as otherwise provided by statute or rule, the several state district courts shall, subject to appeal as provided by law, have original jurisdiction to hear and determine the following matters, and, unless otherwise provided by law, shall determine all questions of fact involved without the intervention of a jury.
(l) All claims against the State founded upon any statute of the State; or upon any regulation of an executive department; or upon any contract, expressed or implied, with the State, and all claims which may be referred to any such court by the legislature; provided that no action shall be maintained, nor shall any process issue against the State, based on any contract or any act of any state officer which the officer is not authorized to make or do by the laws of the State, nor upon any other cause of action than as herein set forth.
.
. Steel's costs include: $85.16 for transcripts and the videotape of the hearing on the motions for summary judgment (HRAP Rule 39(c)(1)); supersedeas bond premiums of $15,750.00 (HRAP Rule 39(c)(2)); filing fees of $130.00 (HRAP Rule 39(c)(3)); and copying costs of $306.60 (HRAP Rule 39(c)(4)).
.Kiewit’s costs include: $232.54 for transcripts (HRAP Rule 39(c)(1)); supersedeas bond premiums of $10,610.00 (HRAP Rule 39(c)(2)); filing fees of $130.00 (HRAP Rule 39(c)(3)); and photocopying costs of $332.80 (HRAP Rule 39(c)(4)). In its bill of costs, Kiewit incorrectly asserts a total of $11,508.14. Accurate addition reveals the total to be $11,305.34.
. The DOT initially objected to Steel's request for costs of copies of the transcripts of the arguments made on the motions for summary judgment on the grounds that the transcripts were not necessary to the determination of the appeal. However, this objection was withdrawn upon realization that the DOT itself had designated these transcripts as part of the record on appeal.
. The DOT also initially opposed. Kiewit’s request for transcripts, but later withdrew this objection.
.
Unauthorized practice of law prohibited. It shall be unlawful for any person, firm, association, or corporation to engage in or attempt to engage in or to offer to engage in the practice of law, or to do or attempt to do or offer to do any act constituting the practice of law, except and to the extent that the person, firm, or association is licensed or authorized so to do by an, appropriate court, agency, or office or by a statute of the State or of the United States....
.